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Rates are current as of 6/1/21.
Maybe you have a home improvement project in mind, such as building a deck, remodeling your bathroom, or replacing your roof — but you need money to complete the job. A personal loan could be a good option. A personal loan is a fixed-rate loan, often paid off in monthly installments with a variety of term length options.
Your credit score is a significant factor in determining which personal loans you’re qualified to receive. We’ve compiled a list of lenders with a variety of credit score requirements so you have options no matter your financial situation.
While some lenders offer attractive minimum interest rates, understand that to be eligible for those rates, you will have to have an excellent credit score. If your credit score isn’t in the best shape, you might get a high interest rate or not be approved by some lenders.
If you’re looking for a solid personal loan lender for home improvement, here are several of the best places to begin your search.
Lightstream‘s minimum APR is the lowest of all the lenders on our list of top picks, making the overall cost of your loan less expensive. However, the lender has slightly stricter eligibility requirements than some of our other top picks, including several years of credit history, stable income, and few or no payment delinquencies on your credit report.
If you’re looking to borrow a large sum of money, Lightstream’s maximum loan amount of $100,000 is on par with SoFi and is significantly higher than most of the other lenders on our list. Lightstream also topped J.D. Power’s 2020 rankings for personal lender satisfaction.
Read Insider’s full review of Lightstream here.
SoFi‘s defining feature is its unemployment protection program, which applies if you lose your job through no fault of your own. If approved for the program, SoFi will put your loans into forbearance, suspending your monthly payments. It’s worth noting that interest will continue to accrue on your loan when it is in forbearance.
SoFi has the highest minimum credit score requirement of any lender on our list — you’ll need a credit score of at least 680. However, the company’s maximum APR is the lowest on our list. SoFi also offers a higher maximum loan amount than most other lenders, allowing you to take out up to $100,000. SoFi came in fourth in J.D. Power’s 2020 rankings for personal lender satisfaction.
Read Insider’s full review of SoFi here.
Marcus by Goldman Sachs provides a unique “on-time payment reward.” If you pay your loan on time and in full every month for one year, you can skip a month of payments, and interest will not accrue during that time. Your loan will then be extended by one month.
The company’s minimum loan length of three years is longer than most of the other lenders on this list. If you want to consolidate your payments over fewer years and save on interest, you might think about using another lender. However, Marcus doesn’t have any prepayment fees, so it’s a good option for paying off your loan before its term expires.
Marcus also came in second in J.D. Power’s 2020 rankings for personal lender satisfaction.
Unlike many lenders, Prosper allows co-borrowers on its personal loans, which is particularly useful if your credit score isn’t in the best shape and you’re worried about qualifying for a loan. The lender’s minimum and maximum loan amounts are both some of the lowest on our list, so Prosper could be a good option if you need $40,000 or less.
Most loans from Prosper are approved within one day, and depending on your bank, it may take one to three business days to receive funds in your bank account.
Read Insider’s full review of Prosper here.
Avant may be the easiest lender to qualify with on our list. Its minimum credit is just a guideline, not a requirement, but most Avant borrowers have a credit score between 600 and 700. If your credit isn’t in great shape and you aren’t eligible to borrow from companies like Lightstream or SoFi, Avant may be a good choice for you.
The company funds loans quickly — if Avant approves your loan by 4:30 p.m. CT Monday through Friday, it often deposits money into your account by the next business day. Avant has great customer service hours, with its phone line open at least 13 hours every day of the week. The lender also has a solid mobile app.
Read Insider’s full review of Avant here.
If you are looking for a small amount of cash to make a minor repair, you can get a loan for as little as $500 with First Tech Federal Credit Union — the lowest of any of our top picks. You’ll also avoid the high APRs that come with payday loans. First Tech loans don’t have any application, origination, or annual fees, and there’s no prepayment penalty.
First Tech doesn’t clarify its minimum credit score, so you’ll have to apply with the lender to see if you qualify.
Though you need to join First Tech to be eligible to receive a personal loan from the credit union, it’s pretty easy to qualify for membership. You can join the Financial Fitness Association for $8 to qualify, and you may already be eligible if you live or work in specific parts of Oregon.
As a longstanding bank, Wells Fargo offers a variety of loan types. Its personal loans offer low interest rates, smaller minimum borrowing amounts, and shorter terms than others. Wells Fargo offers loans between $3,000 and $100,000, for payoff terms as short as 12 months. The bank is the only brick-and-mortar institution on our list as it’s one of few traditional banks to offer personal loans.
You can choose between secured and unsecured loans with Wells Fargo. With secured loans, you’ll be putting up collateral to protect your loan, like your car or home. While secured loans can offer lower interest rates, they can leave important assets at risk. Wells Fargo is the only one of our top picks to offer secured loans.
However, it’s worth noting Wells Fargo’s history with data security and compliance. The bank has faced several federal penalties for improper customer referrals to lending and insurance products, and security issues associated with creating fake accounts several years ago.
Read Insider’s full review of Wells Fargo here.
You’ll have to meet a lender’s credit score requirements to qualify for a personal loan. These minimums vary by institution, and you’ll likely be eligible for an improved rate with a higher score. We’ve chosen lenders with a variety of credit score requirements for our top picks to give you a range of options to choose from.
If you need to access your credit report, you can get it at no cost from any of the three major credit bureaus on annualcreditreport.com weekly through April 20, 2022. This report will give you information about your payment and credit history — though it won’t provide you with your credit score. Looking over your credit report can help you spot errors and find areas for improvement.
You can get your score for free on your credit card statement or online account. You can also buy it from a credit reporting agency.
Credit scores range from 300 to 850. Your score helps determine your eligibility for loans and the rates you receive. Here’s how scores break down, according to FICO:
- Very poor: 300 to 579
- Fair: 580 to 669
- Good: 670 to 739
- Very good: 740 to 799
- Exceptional: 800 to 850
Your credit score usually won’t be affected when you check your rates, because most lenders will only perform a soft credit inquiry to get you personalized rates. But if you accept a loan, lenders will probably generate a hard credit inquiry, which might negatively impact your credit score. A hard inquiry allows a lender to get a comprehensive look at your credit history.
If you aren’t eligible for a loan with the lender you prefer or are being offered a higher APR than you can afford, here are a few ideas to consider for boosting your credit score:
- Request and review a copy of your credit report. Search for any errors on your report that may be dinging your score. If so, reach out to the credit bureau to discuss correcting the mistake.
- Maintain low credit card balances. Maintaining a credit utilization ratio — the percentage of your total credit you’re using — of 30% or less will show lenders that you can effectively handle your credit.
- Make a system for paying bills on time. Your payment history makes up a substantial portion of your credit score, and lenders like to see consistent and reliable past payments. Set up calendar reminders or automatic payments so you don’t fall behind.
- Upstart personal loans. Upstart has a low credit score minimum of just 600, making it a good lender for people with bad credit. However, you may be able to get a loan more easily with Avant, as its minimum credit score is just a guideline, not a requirement. Read Insider’s full review of Upstart here.
- Upgrade personal loans. Upgrade has lower credit score requirements than many other lenders and offers next-day funding to most borrowers, but it charges substantial origination fees and prohibits co-signers. Read Insider’s full review of Upgrade here.
- Discover personal loans. The largest amount you can take out with Discover is $35,000, which is lower than every other lender on our list with the exception of Avant.
- TD Bank personal loans. While TD Bank offers relatively low maximum APRs on its personal loans, the company only lends to borrowers in 15 states and Washington, DC, so it may not be accessible depending on where you live.
- LendingClub personal loans. LendingClub has a relatively high maximum APR, and you might receive your money more slowly than with a different lender. Read Insider’s full review of LendingClub here.
- Best Egg personal loans. You can get a relatively low minimum APR of 5.99% with Best Egg, but to qualify for the best rates you need at least a 700 credit score and $100,000 annual income. Read Insider’s full review of Best Egg here.
- PenFed Credit Union personal loans. PenFed has a low minimum loan amount, but it’s still higher than First Tech’s minimum and you have to become a member of the credit union to take advantage. Read Insider’s full review of PenFed Credit Union here.
- Peerform personal loans. Peerform offers competitive APRs on its loans and only requires a minimum credit score of 600 to qualify, but its minimum loan amount of $4,000 is higher than our top picks.
We’ve compared each institution’s Better Business Bureau score to help you make the best decision possible when choosing a home improvement loan. The BBB evaluates businesses’ trustworthiness based on factors like their honesty in advertising, transparency about business practices, and responsiveness to consumer complaints. Here is each company’s score:
A majority of our top picks are rated A or higher by the BBB, with the exception of Wells Fargo and First Tech Federal Credit Union. You should know that a high BBB score does not ensure a positive relationship with a lender, and that you should keep doing research and talking to others who have used the company to get the most helpful information you can.
The BBB gives First Tech a B- grade in trustworthiness because of 32 complaints filed against the business, including one unresolved complaint. The BBB currently does not have a rating for Wells Fargo as the BBB is investigating its profile. Previously, the organization gave Wells Fargo an F in trustworthiness. In the past few years:
Due to both lenders’ BBB scores and Wells Fargo’s recent history, you might prefer to use a different personal loan company on our list.
What is a home improvement loan and how does it work?
Home improvement loans are often unsecured personal loans that have fixed rates and are usually repaid in monthly installments over several years. These loans are used to fund everything from quick fixes to more substantial renovations.
Loans on our list range from $500 to $100,000, so there’s plenty of options depending on what type of project you’re aiming to complete. You’ll get your money upfront with a personal loan, and will have to start repaying the balance plus interest as soon as you receive the money.
Your credit score will play a major part in determining if you’ll qualify for a loan with a given lender. With a higher credit score, you’ll get a better rate and are also more likely to be approved for a loan. Each lender has its own standards to determine what you’ll need to be eligible for a loan.
What are common reasons to get a home improvement loan?
You can use a home improvement loan for pretty much any project that will fix up or upgrade your home. Several common reasons for getting a loan include:
- Refacing cabinets
- Building a deck
- Repairing a roof
- Remodeling a bathroom or kitchen
- Replacing windows
- Installing hardwood floors
Are home improvement loans tax deductible?
If you use an unsecured personal loan to pay for your home improvement project, your interest payments will likely not be tax deductible because they aren’t secured by your home. Most of the lenders on the list of our top picks only offer unsecured personal loans — this means you don’t have to put up collateral like a house or a car to get one.
Are personal loans legitimate?
Absolutely. You should be safe to borrow a personal loan as long as you are dealing with a reputable lender. Find reviews of the company, look for more information, and don’t pay attention to offers that feel too good to be true. Your best bet is to find personal loans that are backed by a Member FDIC bank or NCUA-accredited credit union.
You can spot possible scams by looking out for these common signs of fraud:
- The lender doesn’t ask for your credit score or payment history.
- The lender’s website is unsecure.
- The lender guarantees approval.
- The lender isn’t open about fees.
- The lender pressures you into taking out a loan immediately.
How much will a personal loan cost?
Your total cost will depend on the amount you borrow, the APR your lender gives you, how long it takes you to pay off the loan, and any associated fees.
The higher the loan amount and APR, the more your loan will cost. With a longer term length, you will divide your payments over more time, so you’ll pay less per month, but it will cost you more total interest.
How quickly can you get your money?
The amount of time it takes you to receive your funds depends on your lender. In some cases, you may be able to get your cash the same day as you apply. After your loan application is given the green light, a lender will usually send the money relatively quickly. However, there’s often no guarantee on how quickly your loan will be approved.
Personal Finance Insider’s mission is to help smart people make the best decisions possible with their money. With that in mind, we evaluated several online personal loan lenders closely. We measured multiple factors to figure out the best personal loan lenders for home improvement, including:
- Annual percentage rates: The lower the interest rate on your loan, the better. We tried to choose lenders who offer low minimum and maximum rates across the spectrum of credit scores.
- Loan term length: We placed an emphasis on personal loans with a number of repayment lengths.
- Loan amount range: We chose lenders with a variety of loan minimums and maximums, so depending on the lender you choose, you may be eligible to take out anywhere from $500 to $100,000. Your exact loan amount will depend on your creditworthiness and other factors.
- Minimum credit score: Depending on your credit score, you may be eligible to take out a loan from some lenders and might not qualify with others. We picked lenders with a range of minimum credit scores so you have options no matter your credit score.
- Standout feature: We chose lenders that have a feature that distinguishes them from their competition, whether that is low rates, unemployment protection, or eligibility for borrowers with bad credit.
- Trustworthiness: Borrowing from an honest lender is often a top priority for many people. With the exception of First Tech and Wells Fargo, we chose lenders with an A or above grade from the Better Business Bureau to provide the most transparent lenders possible. The BBB gives First Tech a B- grade in trustworthiness because of complaints filed against the business, while the group currently does not have a rating for Wells Fargo as the BBB is investigating its profile.
Ryan Wangman is a reviews fellow at Personal Finance Insider reporting on mortgages, refinancing, bank accounts, bank reviews, and loans. In his past experience writing about personal finance, he has written about credit scores, financial literacy, and homeownership.